Published on 12/18/2012 in the Prospect News High Yield Daily.
New Issue: EP Energy sells $350 million 8 1/8%-8 7/8% senior PIK toggle notes due 2017 at 99.5
By Paul A. Harris
Portland, Ore., Dec. 18 - EPE Holdings LLC and EP Energy BondCo Inc. priced a $350 million issue of five-year senior PIK toggle notes (B3/B/) at 99.5 on Tuesday, according to a syndicate source.
The notes pay a cash coupon of 8 1/8% and a PIK coupon of 8 7/8%.
The cash yield is 8¼%, and the PIK yield is 9%.
The cash and PIK yields priced on top of yield talk. The reoffer price came in line with price talk, which specified a slight discount.
Citigroup Global Markets Inc. was the left bookrunner for the quick to market deal.
Deutsche Bank Securities Inc., RBC Capital Markets LLC, Nomura Securities Co., Ltd., Morgan Stanley & Co. LLC, BMO Capital Markets Corp., Credit Suisse Securities (USA) LLC, Goldman Sachs & Co. and J.P. Morgan Securities LLC were the joint bookrunners.
The Houston-based oil and natural gas exploration and production company plans to use the proceeds to make a return of capital to its equity holders.
| Issuer: | EPE Holdings LLC and EP Energy BondCo Inc.
|
| Face amount: | $350 million
|
| Proceeds: | $348.25 million
|
| Maturity: | Dec. 15, 2017
|
| Securities: | Senior PIK toggle notes
|
| Left bookrunner: | Citigroup Global Markets Inc.
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| Joint bookrunners: | Deutsche Bank Securities Inc., RBC Capital Markets LLC, Nomura Securities Co., Ltd., Morgan Stanley & Co. LLC, BMO Capital Markets Corp., Credit Suisse Securities (USA) LLC, Goldman Sachs & Co., J.P. Morgan Securities LLC
|
| Co-managers: | Apollo, Capital One, CIBC World Markets, Comerica Securities, Lloyds TSB, Mitsubishi UFJ, Mizuho Securities, RBS Securities Inc., Scotia Capital, SMBC Nikko, SG CIB, SunTrust Robinson Humphrey, UBS Investment Bank
|
| Cash coupon: | 8 1/8%
|
| PIK coupon: | 8 7/8%
|
| Price: | 99.5
|
| Cash yield: | 8¼%
|
| PIK yield: | 9%
|
| Cash spread: | 748 bps
|
| PIK spread: | 823 bps
|
| Call features: | Make-whole call at Treasuries plus 50 bps until Dec. 15, 2013, then callable at 102, 101, par on and after Dec. 15, 2015
|
| Equity clawback: | Up to 100% at 102 until Dec. 15, 2013
|
| Change-of-control put: | 101%
|
| Trade date: | Dec. 18
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| Settlement date: | Dec. 21
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| Ratings: | Moody's: B3
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| Standard & Poor's: B
|
| Distribution: | Rule 144A and Regulation S with registration rights
|
| Price talk: | 8¼% to 8½% cash-pay, 75 bps behind for PIK, at an expected moderate discount
|
| Marketing: | Quick to market
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